P&G to Sell Pringles Business to Diamond Foods for $2.35 billion
Pringles will join Diamond's dynamic portfolio of brands, which includes Diamond of California and Emerald nuts, Pop Secret microwave popcorn and Kettle Brand potato chips, creating a premium snack-focused company with total revenues of approximately $2.4 billion.
4/6/2011 --- Diamond Foods, Inc. and The Procter & Gamble Company announced the signing of a definitive agreement to merge the Pringles business ("Pringles") into Diamond Foods in a transaction valued at $2.35 billion.
"Pringles is an iconic, billion dollar snack brand with significant global manufacturing and supply chain infrastructure," said Michael J. Mendes, Chairman, President and CEO of Diamond Foods. "Our plan is to build upon the brand equity Pringles has established in over 140 countries. This strategic combination will create an independent, global leader in the snack industry with a focus on quality and innovative products. Not only is this combination immediately accretive, it also creates a platform that we believe will allow us to build shareholder value for years to come."
"We are confident Diamond Foods will be an excellent new home for our Snacks employees," said Bob McDonald, Chairman of the Board, President and Chief Executive Officer of P&G. "This is also a terrific deal for our shareholders – maximizing value and minimizing earnings per share dilution."
Pringles is the world's largest potato crisp brand with sales in over 140 countries and manufacturing operations in the U.S., Europe and Asia. The global, iconic brand has been built over 45 years with a combination of proprietary products, unique package design and significant advertising investment. Pringles will join Diamond's dynamic portfolio of brands, which includes Diamond of California and Emerald nuts, Pop Secret microwave popcorn and Kettle Brand potato chips, creating a premium snack-focused company with total revenues of approximately $2.4 billion.
The combination will more than triple the size of Diamond's snack business and:
* Increase scale in U.S. grocery, mass merchandise, drug and convenience channels to gain greater merchandising and distribution influence;
* Leverage Diamond's sales and distribution infrastructure through a more than doubling of snack sales in the U.S. and U.K., which are Pringles' two largest markets;
* Gain a broader global manufacturing and supply chain platform, with access into key growth markets around the world, including Asia, Latin America and Central Europe;
* Increase Diamond's geographic diversity, with international sales accounting for approximately 49 percent of total revenues on a pro forma basis.
Diamond Foods has a history of building, acquiring and energizing brands through product and package innovation, efficient distribution and brand investment. The Company's total revenues have doubled and earnings per share (EPS) have grown more than four-fold in the past five years.
Diamond of California brand has grown from a single product offering to a full line of culinary nuts over the past decade. Today, Diamond is the category leader with a market share ten times larger than the nearest branded competitor. Emerald, which was launched in 2004, is the fastest growing and second largest brand in the snack nut category. In 2008, the Company acquired and successfully integrated Pop Secret microwave popcorn, and by revitalizing the brand, Diamond has gained over 350 basis points of market share to 26 percent today. In 2010, the Company acquired Kettle Brand potato chips and has fueled double-digit organic growth in its first year of ownership while investing in new products and operational infrastructure.
